India ordered a large-scale investigation into Flipkart and Amazon India on Monday after a retail trade group alleged that the e-commerce giants were indulging in anti-competitive practices to gain foothold in the country.
Competition Commission of India (CCI), the local antitrust body, noted four concerns including the arrangements between smartphone vendors and e-commerce platforms to sell certain handsets exclusively online, and e-commerce firms apparently giving preferential treatment to certain sellers, and said these allegations merit an investigation.
The CCI also ordered Director General to investigate whether Amazon India and Walmart are offering deep discounts on their marketplaces and promoting their own private labels.
A Flipkart spokesperson told TechCrunch that the company was reviewing the document. “The Flipkart group is fully compliant with all applicable laws and FDI regulations. We take pride in democratising e-commerce in India and giving market access to lakhs of MSMEs, sellers, artisans and small businesses, making quality and affordable goods available to consumers through our transparent and efficient marketplace while creating lakhs of jobs,” the spokesperson added.
We have reached out to Amazon India for comment.
The decision to investigate Amazon India and Flipkart would add to the headache of both the e-commerce firms that faced a major regulatory hurdle last year. The direction comes days before Amazon chief executive officer Jeff Bezos is expected to kickstart an event focused on small businesses in New Delhi.
An investigation into the alleged anti-competitive practices by Amazon and Flipkart is the “first concrete long awaited step” in recognizing the disadvantages small traders face today, said Praveen Khandelwal, Secretary General of Confederation of All India Traders — a body that represents 70 million traders and 40,000 trade associations in India.
The Director General has been ordered to complete the investigation and submit the report within a period of 60 days.